The recent relief measures announced by the Reserve Bank of India (RBI) are timely for the microfinance institutions (MFI) sector. According to a recent report titled ‘Impact Note – MFI sector’ released by the credit rating and research agency Acuite Rating and Research, an additional Rs 3,000 crore debt funding to smaller MFIs likely in the current financial year 2021-22. The fresh restructuring window for loans up to Rs 25 crore is also likely to support the microfinance institutions sector in alleviating the additional asset quality stress arising due to COVID-19.
According to Acuite Rating and Research, the central bank’s recent announcements on the special long-term repo operation or SLTRO of Rs 10,000 crore for the small finance banks will ensure higher direct disbursements to microfinance borrowers and better funding access for smaller MFI with asset size less than Rs 500 crore.
Waiting For A Big SCOOP